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(This story has been updated to show that CannCure Investments, a holding of Toronto-based Sol Global Investments, operates One Plant in Florida.)

Florida medical marijuana juggernaut Trulieve has defied expert predictions, increasing its market share back above 50% a year after the state lifted its ban on smokable products and more competition flooded the market.

The gains come at a time when demand is strong, despite economic fallout from the COVID-19 pandemic: Smokable flower sales alone have spiked by 30% in the past two months, according to state data.Industry experts said Trulieve’s market share gains might reflect the depth of cash-flow issues experience by other multistate operators or their inability to invest in the cultivation, processing and retail facilities needed to meet the additional demand.

“For a while it looked like Trulieve’s market share would drop because there’s no way you can maintain a 50% market share” with that kind of competition, said Andrew Livingston, director of economics and research in the Denver office of the Vicente Sederberg cannabis law firm.

In fact, Trulieve’s share of the smokable market did decline to 45% by last fall as MSOs aggressively expanded their footprints in the lucrative, $500 million-plus market.

Many MSOs had spent tens of millions of dollars acquiring licenses in anticipation of being able to sell smokable products and recreational marijuana being legalized.

“But Trulieve’s all-out attention to Florida has allowed it to continue to expand and build its war chest in a way that other MSOs have not because they’ve been spread too thin,” Livingston said.

Livingston, who analyzed the Florida state sales data, noted these developments:

Most MSOs are in a holding pattern, adding no new dispensaries since the Jan. 1.

Trulieve has added four dispensaries since the beginning of the year, bringing its total to 46, according to state data.

A ‘boom time’ for medical cannabis

Florida medical marijuana operators face the same safety and health issues during the coronavirus pandemic as companies elsewhere in the country, such as ensuring that employees have personal protection equipment in all facilities, noted Jeffrey Sharkey, president of the Medical Marijuana Business Association of Florida.

“It’s been challenging for all of them, but they seem to be meeting the demand,” Sharkey said. “They’ve managed it.

“Everyone sees it as a boom time.”

But no one is experiencing the boom as much as Trulieve.

“Trulieve has a huge retail footprint, a massive cultivation production facility, they’re selling a lot of flower, obviously, and they have really fine-tuned their supply-chain logistics, providing a lot of product and SKUs,” Sharkey said. “They really ramped up.”

(Trulieve’s market share of product sales by milligrams also exceeds 50%, according to weekly updates published by the state).

What strikes Livingston most is how many companies have “flatlined” in comparison, meaning they have remained static and haven’t increased their footprints.

Harvest Health & Recreation, MedMen, Green Thumb Industries, VidaCann, Curaleaf. None of those MSOs have added dispensaries since the first of the year, according to state data.

“Dispensary expansion among MSOs is just not occurring,” Livingston said.

There are exceptions.

AltMed, which brands its dispensaries MüV, has increased from 12 to 19 dispensaries since Jan. 1.

The company launched delivery-only service, then started building its retail footprint after Florida lifted the ban on smokable products.

MedMen spent millions of dollars building out facilities and, as recently as last fall, said it would have 12 dispensaries open by the end of 2019.

Yet Livingston calculates MedMen has sold less than $10 million in medical marijuana products since opening its first dispensary in June 2019. He made his estimate based on state sales data and a generous product price average.

MedMen’s market share has averaged 0.8% since the first of the year, Livingston said.

“MedMen clearly has lost a lot of money,” he said.

Market looks bright – for those that can take advantage

For operators that have money to invest, Florida’s marijuana market looks poised for strong growth in the future.

Sharkey expects that rules allowing edibles will be completed by year-end.

Then there’s the possibility of a recreational marijuana initiative passing as soon as 2022, although the issue is controversial and the subject of a state Supreme Court battle.

Adult-use marijuana would again open the sales floodgates.

But if today’s market is an indication, one big question looms: Which competitors will be in position to take advantage of those opportunities and carve into Trulieve’s dominance?

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